Sometimes the way insurance companies make decisions seems to be exactly the opposite of what we try to teach kids about judging about other people:

Don’t make assumptions. Everybody is different, like snowflakes. That kid talks funny, but he might actually be a good friend. Just because he lives in a poor neighborhood doesn’t mean his parents are poor.

Yet, this is exactly how insurance companies work. They have to judge how much of a risk you are based on statistics.

Are you really a worse driver just because you are a bachelor?

Does your mediocre credit score make you more likely to run a red light?

Does moving to a different zip code – having a different mailman – mean you’re more likely to burn your house down?

This is how your premiums are determined. It’s not the content of your character. It’s your superficial demographic profile.

This isn’t just, but this is just how insurance works. It’s most efficient to spread risk over a large population. It’s inefficient to keep track of individual differences in a large population.

What you can do is make sure your policy is in the hands of an independent insurance agent who will re-evaluate your policy each year. Your agent may be able to find a company that is targeting your demographic profile for new business that year. That means using your profile to your advantage, saving you money.

(Don’t worry, your Stewardship insurance agent, Brandon Ream, still knows you’re a unique snowflake.)

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